Papa John’s Reports 4.2% Revenue Growth in Q2 2025, Faces Decline in Net Income

Papa John’s International, Inc. reported its financial results for the second quarter of 2025, revealing total revenues of $529.2 million, a 4.2% increase from $507.9 million in the same period last year. For the first half of 2025, revenues reached $1.05 billion, up 2.5% from $1.02 billion in the prior year. The growth was driven by a 9.5% increase in commissary revenues, which totaled $234.6 million for the quarter, and a 3.8% rise in franchise royalties and fees, amounting to $48.3 million. However, company-owned restaurant sales declined by 3.1% to $179.0 million, reflecting challenges in the UK market where the company has undergone significant restructuring.

Compared to the previous fiscal period, Papa John’s experienced notable changes in profitability. The company reported a net income of $9.7 million for the quarter, down from $12.5 million a year earlier, resulting in diluted earnings per share of $0.28, compared to $0.37 in the prior year. The decline in net income was attributed to increased general and administrative expenses, which rose by 22.9% to $70.1 million, driven by higher marketing investments and incentive compensation costs. Additionally, the company faced higher costs of sales, which increased by 2.4% to $371.7 million.

Strategically, Papa John’s has been focused on its International Transformation Plan, which aims to optimize its restaurant portfolio, particularly in the UK. This initiative has led to the closure of underperforming locations and refranchising efforts, resulting in a net reduction of 43 company-owned restaurants in the UK. The company also opened 45 new restaurants globally during the quarter, with 19 in North America and 26 in international markets. Furthermore, Papa John’s is enhancing its digital and loyalty strategies, including a partnership with Google Cloud to improve customer experience and streamline ordering processes.

Operationally, the company reported a total of 5,989 restaurants in operation as of June 29, 2025, comprising 554 company-owned and 5,435 franchised locations. The company’s focus on digital sales is evident, as most transactions occur through digital channels. The company also noted a 1.6% increase in total comparable sales, with international restaurants showing a 3.7% growth, indicating a positive trend in customer engagement despite challenges in certain markets.

Looking ahead, Papa John’s anticipates continued investments in marketing and technology to enhance customer experience and drive sales growth. The company plans to spend an additional $25 million on marketing initiatives throughout 2025, focusing on improving value perception and customer loyalty. Additionally, the company is evaluating the potential impact of recent tax legislation, which may favorably affect cash taxes paid in the latter half of 2025. Overall, while facing challenges, Papa John’s remains committed to its growth strategies and operational improvements to enhance profitability and market presence.